How much time do you spend managing your rental property?
When growing up, I spent my summers with my Grandfather working on the 20 acres farm. One of our activities was putting on our best outfits, drive into town, knock on doors of rental properties, and collect rent checks from the rentals. If something was broken, we would schedule a time to the hardware store, read repair books, and try to fix the property on our own. As I write this, I believe I’m starting to date myself by saying there was no internet at that time, so I learned how to be “handy” through repairs books and trial and error. The landlord and tenant relationship seemed simple because in most cases we knew every tenant by their first name and sometimes their whole family. If a tenant was unable to pay or not taking care of the place, we simply asked them to leave and changed the locks. It was very simple to manage rentals and have a good working relationship with tenants during these times.
As the saying goes, “ a few bad apples ruined the whole batch”. So let’s fast forward 20-30 years and being a landlord has changed a great deal. To the point that being a property manager is now a degree at UAA. The changes consist of Federal, State, and Local laws are now a thing and have many layers. The use of technology is required because tenants are busy and don’t want to talk to the landlord. Then we must consider a variety of different types of risks is now a daily conversation, which increased liability and insurance costs for landlords.
When someone asks, “Should I manage my rental on my own?” – maybe this is the time to ask a better question that is more in alignment with today’s new world. The real question some should ask is “How much time do you have to learn the rules, technology, risks, and then also actively manage the property?” There are many professionals that have studied and determined that it takes 10,000 hours of practice to finally be a professional in that arena. The IRS defines that a person must have 750 hours a year actively doing real estate to even be considered a real estate professional.
So how would one know if being a self-manager is worth it? Well, we created a calculator on our website where you can enter the time it takes to complete property management activities. The report will add up the time to a total and calculate the value of your time. Here is the link to the calculator: https://www.rpmlastfrontier.com/calculator. This is a great way to determine if you want to self-manage a rental property or hire a professional. After completing the calculator, many landlords start to realize the management tasks can be simple and easy to do, but time adds up and it is now taking time away from their career, family, travels, and life in general.